Sales cost clock

Sales cost solution

Engineer to order (ETO) product companies must have the means to provide sales teams with quality product information without delay. The failure to provide good quality product information may be losing the company business and adding to sales cost. It is not sufficient for sales teams to use generic information, or to ask the customer to wait while engineering prepares product details. The sales cost is greater for companies suffering from low order conversion. Low order conversion rates increase the urgency to reduce sales cost. Technically and commercially accurate quotations are of paramount importance to be competitive.

By working differently, companies can reduce sales cost, reduce time to prepare quotations and lessen the opportunity for error.

 

Problems:

Without immediate access to quality information, Sales will take longer to prepare customer quotations. Companies receive fewer sales opportunities with the reduction of enquiries processed. Alternatively, some companies may employ more staff increasing sales cost further. Low order conversion increases the cost and opportunities lost.

Sales Cost Graph

Sales cost is often difficult to monitor. Although rarely recorded, engineering and production teams incur cost supporting sales work. In the absence of good quality information, Sales use many methods to prepare solutions. A previous project may appear to be a suitable source of information. However, this information is always out of date and likely to contain many inaccuracies. On occasions, Sales request product details from Engineering. This work typically assumes a high priority and is unscheduled. Engineering provides the information required at the expense of delaying scheduled work which can lead to late deliveries and customer dissatisfaction.

During the transfer or processing of information, there is an increased risk of error. Checking procedures are used to reduce the impact of these errors which add further delay and sales cost. Additionally, variations occur with the involvement of different people, leading to slight changes in the design or components used. These variants may add to the product complexity, increasing inventory and uncertainties in the product performance.

 

Solution:

ETO companies can work far more efficiently once a product is designed for configuration. Quality information will be immediately available to the sales team without needing engineering support. The impact of low order conversion is reduced, as the time spent processing a customer quotation is greatly reduced. Sales cost and the number of errors generated is significantly reduced.

Configuration does not necessarily require sophisticated product configurator or design automation software. A configurable product will significantly reduce sales cost, improve quotation time and save errors. To achieve a configurable product, create a product standard reference library. Ensuring that the standards are complete, accurate and contain all the data required by all stakeholders. Depending upon product complexity, it is very likely that the product should be created using product standardisation principles. No further engineering is needed,  reducing sales cost, quotation time with a reduction of risk.

If you need help with any of the above, please contact us at Gatehouse Design, we are always willing to help. We can also provide a free product audit to evaluate opportunities for design optimisation and cost saving.

 

Advantages from different perspectives

·       Achieve faster quotations

·       Opportunity for more accurate and competitive pricing

·       Reduce sales support costs

·       More reliable cost information

·       Less technical variances with higher accuracy

·       Less risk, fewer processes and transfers of information are required

·       Fewer bottlenecks requiring management attention

·       Increased customer satisfaction as customers receive quotations faster

·       Improved productivity as more work is possible

·       Increased sales

·       Reduced margin erosion

·       Less impact of low order conversion rates

·       Reduce sales support costs

·       More reliable cost information

·       Less risk, fewer processes and transfers of information are required

·       Increased sales

·       Reduced margin erosion

·       Less impact of low order conversion rates

·       Increased customer satisfaction as customers receive quotations faster

·       Reduce sales support costs

·       More reliable cost information

·       Less technical variances with higher accuracy

·       Less risk, fewer processes and transfers of information are required

·       Fewer bottlenecks requiring management attention

·       Improved productivity as more work is possible

·       Increased sales

·       Less impact of low order conversion rates

·       Product design can be planned and managed without being driven by production deadlines

·       Reduced unscheduled sales support work

·       Less technical variances with higher accuracy

·       Less risk, fewer processes and transfers of information are required

·       Fewer bottlenecks requiring management attention

·       Reduced unscheduled sales support work

·       More reliable cost information

·       Less technical variances with higher accuracy

·       Less risk, fewer processes and transfers of information are required

·       Fewer bottlenecks requiring management attention

 

Further help and assistance

Gatehouse Design are specialists in product standardisation, product configuration and design automation. We can help companies develop highly effective product strategies, maximising profitability, productivity and customer satisfaction. We can help you reduce sales cost and improve the efficiency of your business. Please contact us to discuss any product design related issues that you may have.

There is an offer a free product audit to help identify opportunities for product standardisation, product configuration and design automation. Additionally, Gatehouse Design has published many helpful white papers and articles which are available on this website.

 

The author

Written by Peter Slee-Smith 15/05/2018.

Peter Slee-Smith founded Gatehouse Design in 2012, a Chartered Mechanical Engineer with more than 30 years experience in industrial design. Peter qualified with a Masters Degree and had held senior positions in many leading engineering and product manufacturing companies. He is passionate about product design efficiency and has written many articles on the subject. Based in Littleport just outside Ely in Cambridgeshire, Gatehouse Design specialises in product standardisation, configuration and design automation.

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